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While vehicles with internal combustion engines (ICE) will continue to dominate sales in the Indian personal mobility market, electric vehicles have a considerable market opportunity in the two-wheeler segment. This is one among the many points raised in a newly released report ‘Electric Vehicles: Challenges and Opportunities’ released at the 10th World CEO Sustainability Summit in New Delhi on January 30, 2013

The report goes on to say that two-wheelers are used mostly for short distance travel, which is ideal for EV battery technology that allows limited range travel on a single charge. The significantly lower long-term running cost of two-wheeler EVs has already seen a 200 per cent jump in sales of these vehicles in our market. However, the recent removal of subsidies on two-wheeler EVs by the MNRE has resulted in a drop in sales of over 70 per cent. This goes on to show how sensitive the EV is to prices.

The report states that despite government subsidies, high fuel prices and informative advertising about the environmental virtues of going electric, sales of electric vehicles have not improved. This has taken place largely due to three reasons, adverse consumer perception about EVs, their high purchase cost, technological limitations and the lack of competition in the Indian EV market.

At present, the only EV sold in India is the Mahindra Reva. Competition triggers product innovation and the lack of it has resulted in the failure to establish a value and supply chain for EV components, batteries, charging points and competitive pricing.

Chassis design, range anxiety, concerns about battery longetivity, lack of charging infrastructure and high purchase price has discouraged potential customers from buying electric vehicles in India. Also, the fact that batteries have a limited life span and are expensive to replace does not encourage people to buy EVs.